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While major stock market indices just posted their worst years since 2008, major sports leagues such as the NBA and NFL reported record earnings and highest franchise sales in 2022.
According to one industry expert, these sales aren’t likely to slow down any time soon.
“If some of those teams [for sale] Bill Mulvihill, head of US Bank Sports and Entertainment Group, told Yahoo Finance: “There is no reason to believe that valuations will go backwards,” he said.
Walmart (WMT) heir Rob Walton’s record-breaking $4.65 billion sale of the Denver Broncos has pushed sports franchise valuations to new highs in 2022.
More high-value sports teams are on sale this year, including MLB’s Los Angeles Angels of Anaheim and Washington Nationals, Premier League’s Manchester United, and NFL team Washington Commanders.
According to Forbes, Commanders could sell for more than $7 billion, dwarfing the previous record set by Walton’s acquisition of the Broncos.
Mulvihill, like other industry experts, believes that sports’ rising valuations are due to the industry’s growing ties to big tech.
In 2022, Apple (AAPL) will broadcast MLB games and inject nearly $2.5 billion into Major League Soccer (MLS) over the next decade. The NFL signed a $1 billion annual deal with Amazon (AMZN) to give exclusive streaming rights to the NFL Sunday Ticket to YouTube (GOOG) for an estimated $2.5 billion.
Al Guido, president of the San Francisco 49ers and chairman and CEO of Elevate Sports Ventures, told Yahoo Finance: “I didn’t realize how valuable it would be if I could cut the cord. It was really the only sticky thing left, in terms of eyeballs.”
According to Mulvihill, media is the main driver of sports revenue, accounting for more than 50% of most teams’ revenues. In a league like the NFL, where national broadcast revenue is evenly distributed, it’s easy to see revenue growth and potential ROI.
Last year, the Green Bay Packers reported $347.3 million in shared media revenue. The Packers cost him about $501 million and he made a 70% surplus before the regular season started. His billion-dollar deals with companies like Amazon and Google (GOOGL) make those teams even more valuable.
Michael Rapkoch, Founder and CEO of Sports Value Consulting, told Yahoo Finance: “Actually, there’s something there. Revenue is up. Attendance is still high.”
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Josh is a reporter and producer at Yahoo Finance.
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